Appetite for destruction: why our taste for a bargain is damaging supermarket sales

The volume of items sold in British supermarkets is currently enduring its steepest decline since the end of the second world war, analysts have said.

And it’s our determination to pay less and spend less that is driving down sales.

The revolution occurring within the British grocery market has continued as consumers’ loyalties to the UK’s largest stores are being re-aligned as budget up-starts Lidl and Aldi have thoroughly shaken-up the market.

Analysts at IRI said that the volume of goods sold in the first half of 2014 fell by 3.2%. Alongside the impact of the discount supermarkets, IRI attributed the fall to other factors including the current squeeze on wages, price inflation and the effects of child benefits cuts.

IRI strategic director of insight Tim Eales said that consumers moving to supermarkets’ own-brand goods instead of higher priced alternatives had cost supermarkets up to £800m in 2013 and that the figure would be higher this year.

He said: “They are cutting back on how much they buy from the major supermarkets, some moving instead to the discount shops, buying lower priced alternatives or simply making do with less. This is having an unprecedented effect on sales from the UK’s major supermarkets.

“It is going to be increasingly difficult for supermarkets to find paths to growth during the next few years unless they think differently,” he added.

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Readers' comments (1)

  • Anonymous

    It really should not come as any surprise for retail sales to be in decline and likely to remain so. Freely available credit, perpetual optimism fueled by politicans and banks, and full employment provided an environment for increased consumption. Five years on, we are facing lower living standards and income levels, a requirement to reduce personal endebtedness coupled with an increased environmental understanding which combined will automatically reduce customer spend. It should be no surprise and our retailers, politicians and the city institutions need to face up to that reality and adjust their expections accordingly Contraction is the order of the day

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